Poland’s PKN Orlen petchem ops profit rises 48% on better margins

25 April 2013 09:24[Source: ICIS news]

LONDON (ICIS)--PKN Orlen’s petrochemical business posted a first-quarter operating profit of zloty (Zl) 512m (€123m, $161m), representing an increase of 48% year on year on the back of improved margins, the Polish group said on Thursday.

Petrochemical revenues edged down to Zl5.1bn for the quarter from Zl 5.2bn in the same period of 2012, it added.

“The positive impact of the macroeconomic environment connected mainly with improving petrochemical margins year on year, increased the segment's operating result by Zl216m year on year,” Orlen said in a commentary on its latest financial results.

Lower sales volumes, particularly in polyolefins due to unfavourable market conditions and in fertilizers because of adverse weather conditions, pulled down the petrochemical segment’s operating profit by Zl20m.

The petrochemical business' operating result was also dragged down by a loss of Zl38m from the revaluation of inventories, Orlen said.

Overall petrochemical sales volumes declined 2.7% year on year to 1.3m tonnes, with fertilizer sales down 20.7% to 291,000 tonnes, but polyvinyl chloride (PVC) sales volumes increased 15.2% to 114,000 tonnes, it added.

Orlen's model petrochemical margin for the first quarter was €737/tonne, compared with €618/tonne in the first quarter of 2012 and with €729/tonne in the fourth quarter of 2012, the company said.

PKN Orlen, which also a refiner and fuel retails, reported an overall first-quarter net profit of Zl145m, sharply lower than the Zl1.24bn profit in the same period last year, with sales revenues down 6% at Zl27.5bn.

A decline in domestic fuel consumption caused by the economic slowdown was a significant factor in the deterioration of the company’s bottom line, Orlen said.